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The need for these other types of services is a choice of the individual trader. If one or more of these capabilities are important to you, then seek out the broker who can serve your particular needs. |
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If you think these might be things you want to trade in the future, don't worry about whether your chosen broker can support them now. In the near future, before mid-2001, all of the good direct access brokers will be able to handle all of these types of securities. |
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In the beginning of this book, we might have come down a bit hard on the online brokers who are trying to provide a broad range of financial services to their customers. After all, who are we to say that the online auction of brownie recipes is not valuable to some of you? |
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But, we repeat, what do all of these services have to do with trading? Are they really just a way to divert your attention from trading services? Are these firms admitting that they don't have leading-edge trading capabilities? |
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If you intend to trade, then find the best direct access, software-based broker you can find. |
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Of course you want help learning how to trade. But the regulators have ruled that there is a conflict of interest if a broker also teaches you how to trade. Brokers earn their money from commissions on trades, so there is simply too much temptation for them to teach clients to do lots of trades. |
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As Arthur Levitt, chairman of the SEC, said in a speech to the National Press Club on May 4, 2000: |
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These firms should be on notice that they are still broker-dealers and must operate within the existing rules. Any firm, whether day trading or online, that recommends a type of investment strategy or customizes research should ensure that it is suitable for its customers. |
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That simply means that if your broker trains you, it must ensure that every trade you make is suitable for you, your knowledge level, your experience level, and your financial situation. As an astute trader, you |
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